WASHINGTON – In one of their worst weeks ever credit unions got some good news yesterday when the Treasury Department awarded 48 community development credit unions a total of $67 million in long-term loans that they can count as capital.
The funding going to credit unions, by far the most institutions getting the left over funds from the banking bailout’s Troubled Asset Relief Program, were part of a total of $570 million awarded to 84 community development financial institutions under the Treasury’s Community Development Capital Initiative.
The biggest credit union recipients were: Freedom FCU in Roanoke, Va. ($9.3 million); Fairfax County FCU, Fairfax, Va. ($8.04 million); Carter FCU, Springhill, La. ($6.3 million); Hope FCU, Jackson, Miss. ($4.5 million) and Santa Cruz Community FCU, Santa Cruz, Calif. ($2.8 million).
Also: Border FCU, Del Rio, Texas ($3.3 million); Atlantic City FCU, Lander, Wyo., ($2.5 million); Opportunities FCU, Burlington, Vt. ($1.1 million); Southside CU, San Antonio, Texas ($1.1 million) and Southern Chautauqua FCU, Lakewood, N.Y. ($1.7 million).
Dozens of CDCUs got smaller investments, including: North Side Community FCU, Chicago ($325,000); North Side Community FCU, Rantoul, Ill. ($425,000); Neighborhood Trust FCU, N.Y. ($283,000); Faith Based FCU, Oceanside, Calif. ($30,000); Episcopal FCU, Los Angeles ($100,000); and East End Baptist Tabernacle FCU, Bridgeport, Conn. ($7,000).
The biggest recipients of the funds were: Community Bankshares, Brandon, Miss. ($54.6 million); Southern Bancorp, Arkadelphia, Ark. ($33.8 million); First M&FCorp., Kosciusko, Miss. ($30 million). University Financial Corp., St. Paul, Minn. ($22.1 million) and Security Federal Corp., Aiken, Miss. ($22 million).
The funding went to financial institutions that had at least 60% of their lending and other economic development activities in areas underserved by traditional financial institutions.
The investments were made at a dividend rate of 2%, which will increase to 9% after eight years, During that time the funds can be counted as secondary capital under NCUA’s new worth rules.
